[CHICAGO] Kraft Heinz Co is joining the ranks of Big Food peers with a venture capital fund focused on concepts that are shaking up the food industry, such as supply chain technology and e-commerce.
The packaged-food giant has committed US$100 million to start a new firm called Evolv Ventures, which will invest in food technology companies. To lead the Chicago-based fund, Kraft hired Bill Pescatello, a founding member of Peacock Equity, an investment group put together by NBCUniversal and GE Capital.
"There's a ton of disruption in the food industry driven by technology and new models," Mr Pescatello said in an interview. Evolv will focus on startups working on supply chains, logistics, e-commerce and direct-to-consumer projects, he said.
Evolv is Big Food's latest effort to boost flagging sales by hitching its wagon to fast-growing food startups. In 2016, Kellogg Co invested US$100 million in a venture fund, while General Mills Inc has used its fund to invest in companies such as Kite Hill and Beyond Meat.
While this is Kraft Heinz's first fund, it also has a division called Springboard, which nurtures upstart brands and is on the lookout for opportunities beyond the company's mainstay brands such as Velveeta and Jell-O. Kraft Heinz needs to find new hits: The company's margins are under pressure due to higher marketing and product-development expenses.